LHA cuts to cost £120m a year

Of these, an estimated 35,000 households will approach their local authorities for housing assistance, and where councils have a legal duty to help they will face costs of up to £120 million a year for providing temporary accommodation such as hostels or bed and breakfasts.

The costs would cancel out a fifth of the £600 million the Treasury has said it will save from the cuts in 2012, the first full year they are in force.

There will also be additional administrative costs to councils in processing the thousands of homelessness applications they are likely to receive.

Shelter’s chief executive Campbell Robb said: ‘Shelter’s research clearly shows that not only is the Government’s budget regressive, it doesn’t even add up. The devastating impact of cuts to local housing allowance on some of the poorest families in Britain will mean the government will not save anywhere near as much as it has claimed.

‘Now that the true cost of these proposals has come to light, the Government must urgently rethink these reforms and develop an alternative that protects the most vulnerable and delivers real savings to the housing benefit bill.’